Starting a Business in Brazil

There are basically two kinds of companies that one can invest in: the Soceidade Limitada (LTDA) and Sociedade Anonima (SA).

The LTDA is a very flexible model to initiate a business. These businesses are governed by the Articles of Association (Contrato Social). In this model, the entire capital of the company is split into shares. Resident Brazilians manage the company as appointed by the shareholders.

The SA model is more expensive and transparent but not as flexible as LTDA. This model is regulated by Estatutos. In this model, the capital is split into classes of shares. The fiscal council and management board manage this company. Each of these committees needs to have resident Brazilians.  

Whatever the model one chooses for the company, to set up a company in Brazil and get it registered the following steps need to be executed:

1)   The first step is to check the name of the company in the Sao Paulo state and pay the registration fees.

2)   Next, one needs to register and obtain an identification number (NIRE) from the commercial board pertaining to the state. Based on the nature of the industry, the company has to register with either the Board of Trade or the Registry of Civil companies.

3)   One needs to get the CNPJ number, which will register the employees with INSS (the National Institute of Social Security). In addition, registration for state tax and federal has to be done.  

4)   The taxpayer enrollment needs to be confirmed. Information regarding the company needs to be entered for this, and the legal representative has to confirm the same through the Office of Federal Revenue. If the company deals with sales or purchases, registration with state authority is also required.

5)   Printing invoices and receipts needs authorization from Secretaria da Fazenda Estadual. Get the same by filling the AIDF form.

6)   Registration with the Registry of Municipal Taxpayers needs to be done. For this, the CCM enrollment form needs to be submitted.

7)   The TFE tax also needs to be paid to the Municipal Taxpayers Registry. This tax pertains to the operation permit and is dependant on the corporate purpose of the company.

8)   After all this, one needs to apply for an operations permit from the municipality. A 30-day gap is provided to fill out these forms after registration with the Secretaria de Finanças e Desenvolvimento Econômico. This license is essential for any operations to initiate. But since this is a long process, municipalities allow initiation if the TFE is paid.

9)   Employees need to be registered in the social integration program by setting up a fund for unemployment (FGTS) in any bank. Next step is to register with the employees union and notify the labor ministry.

This is the basic procedure for setting up your business in Brazil. Once set up, you can reap the multiple benefits of investing in Brazil.

Source – Invest in Brazil